Assigned to NRIPD                                                                                             FOR CAUCUS & FLOOR ACTION






Forty-ninth Legislature, Second Regular Session





water recharge; direct use.




           Retroactive to January 1, 2009, allows the Director of the Arizona Department of Water Resources (Director) to exclude certain withdrawn groundwater when calculating a water storer’s long-term storage credit.




The Groundwater Management Code (Code) was enacted in 1980 to control severe groundwater depletion and to provide the means for allocating Arizona’s groundwater resources effectively to meet the state’s future needs.  The Arizona Department of Water Resources (ADWR) administers the Code. As part of its groundwater management framework, the Code designates five Active Management Areas (AMAs) - Phoenix, Prescott, Pinal, Santa Cruz, and Tucson - where there is a heavy reliance on mined groundwater. 


In 1987, the Legislature enacted laws providing for the underground storage of water and related aquifer recharging activities (A.R.S. § 45-801.01 et seq.). According to A.R.S. 45-801.01, it is the public policy of state to protect Arizona’s general economy and welfare by encouraging the use of renewable water supplies, instead of groundwater, through a flexible and effective regulatory program for the underground storage, savings and replenishment of water.


The ADWR, through the Director, issues water storage permits and recharge facility permits, and regulates an accounting system for the permittee’s accounts pursuant to the state’s public policy. When eligible water (e.g. effluent, Central Arizona Project water) is stored underground for more than one year, long-term storage credits may be issued. The Central Arizona Water Conservation District, which is a tax-levying public improvement district that manages the Central Arizona Project (CAP), also requires the execution of a water storage agreement for those who intend to store excess CAP water at one of its six recharge facilities located in the Phoenix, Pinal and Tucson AMAs.   


As it relates to long-term storage credits, S.B. 1241 only applies to the storage of CAP water within an AMA by a storer that is not a municpal provider.  


Long-term storage credits are earned in the process of storing eligible water that exceeds the amount of groundwater that has been pumped by the water storage permittee during a calendar year, provided the stored water could not have reasonably been put to direct use. The statute prescribes requirements for the Director to follow when determining the eligibility of long-term storage credits. Stored water is eligible for long-term storage credits if the water meets all of the following criteria: 1) the water cannot reasonably be used directly, which is defined in A.R.S. § 45-802.01(22) and commonly referred to as “waterbud”; 2) the water was not recovered on an annual basis (short-term); and 3) the water would not have been naturally recharged within an AMA.


Long-term storage credits generated through the storage of water are held for the purpose of subsequent recovery and use, and may also be sold, leased and exchanged within the AMA where the credits were earned. Recharge permit holders are required to file annual reports with ADWR, and statutes provide for recovery requirements.


There is no anticipated fiscal impact to the state General Fund associated with this legislation.




1.      Retroactive to January 1, 2009, modifies the definition of water that cannot reasonably be used directly to instruct the Director, when calculating long-term storage credits for water storage permit holders, to exclude the amount of groundwater that was withdrawn during the year for mineral extraction and metallurgical processing and that was delivered in the same year to an irrigation district.  The irrigation district must be located in the same AMA where the groundwater was withdrawn and the delivered water must be put to direct use by that district.  In addition, in order for the groundwater that was withdrawn for mineral extraction to be exempted from the Director’s calculation, there must be a demonstrated reduction in the amount of groundwater (savings to the aquifer) that otherwise would have been withdrawn by that district during the year. The provisions of S.B. 1241 apply only to stored CAP water within an AMA by a storer that is not a municipal provider.


2.      Repeals the provisions of S.B. 1241 on January 1, 2025.


3.      Makes technical and conforming changes.


4.      Becomes effective on the general effective date.


Amendments Adopted by Committee


·         Adds a retroactivity clause and delayed repeal date.


Senate Action


NRIPD            DPA    2/8/10              5-2-0-0


Prepared by Senate Research

February 10, 2010